893.50/5–749: Telegram
The Secretary of State to the Consul General at Shanghai (Cabot)
918. Urtel 1550, May 7. Dept appreciative comprehensive timely coverage and thorough analysis Shanghai developments provided by ConGen and fully cognizant potentially explosive situation now existing. However, US Govt cannot take any official action which wld have effect directly assisting Chi Commies in efforts occupy all China intact and accelerating complete disintegration anti-Commie resistance. US Govt has consistently followed policy China of avoiding representations this character which might constitute involvement civil strife, but is nevertheless desirous take all appropriate steps protect Amer lives and properties. Dept wld have no objection, therefore, to procedure outlined first par Nanking’s 989, May 10, rptd Shanghai 550 in order reduce insofar as possible deleterious effects on American interests which any determined efforts defend city might have.
Re problem possible large scale demolitions, Dept of opinion extreme care must be exercised avoid premature discussions this question with Chi officials. Having in mind analysis in third par reftel, undue concern or veiled threats by US re demolition Amer properties might result opposite effect than that desired. When you are convinced such demolition imminent, therefore, you are authorized in ur discretion make appropriate representations highest mil and civ authorities urging protection Amer properties.
Re point (3), specific Congressional prohibition against using ECA funds in areas under Commie domination clearly precludes excess stockpiling Shanghai. However decision maintain 30-day level essential supplies for present wld appear somewhat mitigate this problem. Dept cannot imagine private capital undertaking credit hazards under present circumstances and conditions China.
Re (4), although official participation and assistance in evacuation Amers from Shanghai area considered completed, Dept wld of course make every effort reestablish evacuation facilities, both commercial and govt, for removal Amers from Shanghai shld conditions following takeover so warrant. With pattern defections, absence determined resistance and failure carry out demolitions established in all cities lost to Commies from Changchun to Nanking, however, wld appear unlikely [Page 314] trend will be reversed Shanghai where eventual defeat Nationalists inevitable and escape virtually imponible.